How Bill Gates Blew $258 million in India's HIV Corridor

by Elizabeth Flock | Jun 5, 2009

The purpose was noble, the money generous. But the software mogul's charity for HIV prevention in India has failed to make a lasting impact

On a humid afternoon, former sex worker Fathima (name changed) welcomes a group of illiterate women — still in the trade and needing protection from HIV — into the Mukta clinic in Pune. As a “peer educator,” it’s her job to convey to them the message of safety. But the visitors shuffle tentatively as expensive-looking posters in English paper the walls around them. Why would a clinic serving illiterate visitors use more English than Indian languages?

The answer lies in where that money comes from. The Pune clinic is part of a network one hundred-plus non-governmental organisations (NGOs) working under the umbrella of Avahan, India’s largest HIV prevention initiative. Avahan, or “call to action,” is a brain child of the world’s largest philanthropist: Bill Gates.

Gates had announced the 10-year, $100-million initiative to stop the spread of HIV/AIDS in India during his much heralded visit to the country in November 2002. This was to be the largest of its kind for the Bill & Melinda Gates Foundation.

The timing couldn’t have been more appropriate. After nearly two decades of piecemeal efforts to counter HIV, India was hurtling towards an AIDS epidemic. Millions of poor people exposed themselves to the dreaded virus due to a lack of awareness. Government agencies and NGOs didn’t have the money to preach safety or treat the infected. Gates showed his seriousness by later raising the budget to $258 million.

Seven years later, back at the Pune clinic, Fathima has counselled the women, given them the sheaths of safety and sent them back. It is time to worry about the future. The bad news is Avahan is ready to pack and go; and Fathima is set to lose her income. She doesn’t want to slip back into prostitution. At the age of 45, she doesn’t have much of a career there anyway.

When it started on the ground in 2003, Avahan set for itself three goals: Arrest the spread of HIV/AIDS in India, expand the programme from the initial six states to across the nation, and develop a model that the government can adopt and sustain so that the project could be passed on to it. More than five years later, Avahan hasn’t achieved any of these goals. Doubtless, the initiative has made a dent into the HIV/AIDS problem, but the impact is marginal for a bill of $258 million. And now Avahan is leaving, handing over the reins to the government-run National AIDS Control Organisation (NACO), which doesn’t want to inherit it. It is too expensive for the budget-starved establishment that is as nimble as a sloth. If NACO takes over, it will try to prune the costs of the programme. Salaries for peer educators will go.

A Five-Star InitiativeWhen Gates Foundation got down to work in India, the priority was clear. It decided to hire the best minds in business to run its initiatives using sound principles of management. Avahan was ready to spend what it takes to get the best bosses and started its search at McKinsey, the consulting powerhouse. The recruiters zeroed in on Ashok Alexander, who had spent 17 years turning Indian businesses into global challengers. “They made me an offer I couldn’t refuse,” Alexander recalls, sitting at his plush office in New Delhi. “I liked the ambitious arch of the HIV/AIDS programme and it was a chance for me to do something new.”

Soon, the 15-member team was in place. Ten of them had come from a private-sector background. The team members tackled HIV/AIDS much as they would a problem at McKinsey. Alexander’s office is papered with data and maps containing hundreds of coloured dots plotting the disease across the country. The argot is sheer B-school: Avahan is a “venture,” its HIV/AIDS prevention programme a “franchise,” the sex worker the “consumer.”

The classical business principles helped Avahan start on a big scale in six states simultaneously. But the lack of public health experience also led to a compromise on quality. Tejaswi Sevekari, director at Saheli, a sex workers’ collective for HIV/AIDS in Pune, remembers observing the kinks during her stint at Pathfinder International, an NGO that works with Avahan. Data collection and reporting were entirely in English and had no pictures. Five years later, the scene is the same; the project hasn’t fully given up on English though no “consumer” understands the language.

Avahan operated in a pyramid, with Alexander and his team overseeing the work of more than 100 NGOs. The lack of practical experience at the top manifested itself in different ways. When Avahan introduced sleek mobile vans to bring clinics directly to the brothels, the expensive-looking vehicles were sometimes met with intense suspicion. At the Mukta clinic, Dr. Laxmi Mali says sex workers initially thought the van was from the police or the government. They refused help.

False MovesThe early missteps are largely anecdotal. But in 2005, an internal evaluation showed a big portion of Avahan’s efforts had gone to waste. As many as 31,000 community members had been contacted by Avahan’s outreach programme, but only 11,000 actually visited the clinics. The Avahan executives had assumed the peer educators would already know what the prevention services were without explanation; the reality was they didn’t.

Avahan’s craving for scale also meant it overshot quite a bit. It started with a bang in six states, with 50 sites for truckers in the south. But by mid-2005, only 12 percent of truck drivers were even aware of their services, and only 7 percent took advantage of them. This forced Avahan to reduce the sites to 20. For similar reasons, Avahan’s 6,000 sexually transmitted infection (STI) centers were brought down to just 800.

Alexander’s team tried to fix the glitches. For example, Avahan tried to allay the fears of sex workers (such as those who had met the mobile van with suspicion) by hiring them to act as intermediaries between the programme and communities. An insider could be more persuasive. Good idea, but Avahan’s decision to pay them a salary has come in for criticism, because other NGOs can’t recruit sex workers as volunteers.

A series of evaluations published in the AIDS Journal in 2008 show that the jury is still out on the programme’s impact. The evaluations, funded by the Gates Foundation, were mostly on the methods of data collection. One study, which sought to determine whether Avahan was responsible for the decline in HIV prevalence in Karnataka, failed to prove that it played a key role.

Where Has All the Money Gone?At the core of Avahan’s failure to make a serious difference to India’s fight against AIDS is the way it spent money. It was an expensive operation, never tired of throwing money at the problem. In a country where a branded condom sells for just 10 cents, what did Avahan spend on? It’s difficult to say because Avahan’s finances are largely opaque. Avahan’s outlets sell five million condoms a month and distribute another 10 million. Asked how so much could be spent on condoms, Alexander laughs, saying, “It’s a bit more complicated than that.” Probed further, Alexander says he doesn’t know the financials off-hand, nor can he give them later.

Travel would have been one drain. Jonty Rajagopalan, Avahan programme officer from 2006 to 2008, says she would take flights every month from her base in Hyderabad to her focus areas in Andhra Pradesh and Tamil Nadu, instead of being based in a focus area. Another large chunk: salaries. Alexander’s annual package is $424,894, the second-highest in the foundation globally, not including the presidents and operating officers. Avahan’s targeting intervention (TI) officers are also paid three or four times what a typical NACO TI officer is paid.

Avahan’s marketing was done in style too. Eldred Tellis, head of Sankalp, an HIV/AIDS-focussed Mumbai NGO that has worked with Avahan, says he has seen a lot of money go into fancy publications on high-quality paper, reporting the programme’s work. Very little went to the people on the ground. Vijay Mahajan, chairman, Basix, a microfinance institution, comments on Avahan: “There is too much money and too many really smart people with too little coming out.”

An Uncertain TorchbearerKnowing that it would have to inherit the project, NACO sent out evaluation teams to sites in four states to get some clarity on costs. NACO’s head, Dr. Sujatha Rao, says the evaluation threw up one clear message: Large parts of the programme are not sustainable by NACO. “We told them you can’t create a huge number of assets and then just leave and expect the government to take over everything,” says Rao.

But Alexander disagrees. “We are not perpetual funders. We try to be catalytic,” he says, ebulliently confident that the HIV/AIDS epidemic will soon be contained, with or without the foundation. Either way, it will have to be — Avahan is now repositioning, focussing on maternal and newborn health.Ashok Row Kavi, consultant for UNAIDS and chairman of Humsafar Trust for gay and transgender health, says Avahan’s expectations were unrealistic. “They wanted HIV to disappear in five years. For that to happen, a lot of people would have to die.”

NACO’s annual budget is Rs. 1,100 crore ($225 million), none of it spent on Avahan currently. Rao just can’t find enough money to continue the project. “We can never offer a replicable model. And if we are unable to sustain the programme, all of their effort will be for naught,” she says, shaking her head.When probed about the difficulties of handing over the massive programme to the government, Alexander says the transfer is going just fine. Kavi differs; he says that the transfer discussions between NACO and Gates Foundation are “running into a brick wall right now. Costs need to be brought down, but they can’t figure out how.” He also fears Avahan’s now-experienced MBA-graduate TIs, facing shrinking salaries, will depart. The question of running air-conditioned clinics like Avahan doesn’t even arise.

The biggest hole in quality will arise where it can hurt most. Hussain Makandar, HIV counsellor at the Mukta clinic, is worried about condoms; the ones from Avahan lubricate; the ones from NACO break and the sex workers stop using them. Alexander insists that only a 10th of the project will transfer to the government this year and the rest will happen slowly over the next five. “We’re doing a transition programme. We’re not saying, ‘here’s the programme, and we’re off.’” But NACO and Mukta officials, among others, are confused over the timeframe.

So, the final report card on Avahan:

Goal 3: Develop a model for HIV prevention that can be implemented by the government sustainably. NACO’s resounding vote: Not achieved.

Goal 2: Expand the programme nationwide. Avahan could not go beyond the six states it started with. Not achieved.

Goal 1: Arrest the spread of the disease. The number of Indians living with HIV/AIDS has been officially corrected from 5.1 million to 2.4 million. This was a statistical change, not an improvement in health. Impact not known.

Back in the great Indian sex bazaar, prostitution is a growth industry and condom an exception. “New faces keep coming in every month (to the brothels),” says Dr. Mali. “Twenty percent of the people we now see are infected, the same as when we started.”